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Smartphone, in-app purchases to outpace online

Palm Springs, Calif. — Although mobile shopping in the United States has not yet reached the tipping point, 50 percent of online purchases being made on mobile is not far off, according to Jason Morse, VP mobile product for Criteo, during his opening remarks at the eTail West's annual summit. During yesterday's pre-conference track focusing on mobile and tablet, Morse spoke about how mobile's biggest opportunities are the smallest devices.

Morse was of course referring to smartphones. The shift from online purchases to mobile purchases is occurring at a rapid speed, with 26 percent of online purchases now being made on mobile devices, due in part to the improving quality of mobile. More retailers are choosing to build apps and mobile sites in-house instead of through third-party providers, giving them more control over the platform. In addition, mobile payments are now getting easier for consumers. And finally, a huge push is coming from smartphones reaching an optimal size.

Morse believes that the iPhone 6 has hit upon the optimal screen size and he could not stress enough the power the smartphone was having on making mobile retail more successful. Criteo tracked results for eight months and found that iOS mobile purchases were outpacing Android by 100 percent. Those results coincide with about the time the iPhone 6 and 6 Plus were launched last October. "With 75 million iPhones being sold in Q4, that means the percentage of traffic and sales on mobile web is larger than it is on Android and still increasing," he said.

Overall in the United States, the conversion rate on mobile is 2.5 percent—breaking down to about 50 percent of sales being done on a tablet and 50 percent on a smartphone. That number changes a bit in some retail sectors, such as fashion, where mobile purchasing is higher, around 66 percent and tablet purchasing is 36 percent. And in the travel industry, 66 percent of all digital purchases are made on smartphones. Morse said that numbers are growing and smartphones will soon overtake tablets in most retail sectors.

Mobile app use is also growing. In 2014, the downloading of shopping apps grew more than 170 percent. Therefore, there is still a lot of potential growth in the space of mobile purchasing.

"This year will likely see a strong growth in shopping apps," he said, and cited that 77 percent of retailers that Criteo works with have apps that are ready to make sales within the apps. "If it's not ready, you need to add it really fast," Morse said of commerce-ready apps. In fact, some of his clients are already seeing 10 percent of total sales coming from apps.

With the growing strength of apps, Morse recommends that retailers learn to use them effectively. "Not just for loyalty, but support for the future to drive advertising and to help your company grow organically."